Consumer spending in NYC fell 65% in 2020: report

Hardest hit was the restaurant industry. Chinatown eateries reported an 82 percent decline.  

By Edward Lee

Data Scientist

Mastercard Center

As we show in a new analysis of Asian American communities in New York City, not only were they harder hit than the rest of the city, but they were also hit earlier than other communities, likely due to xenophobia and a misguided fear of Asian establishments at the outset of the pandemic.

In partnership with the Asian American Federation of New York (AAF), the Mastercard Center analyzed aggregated and anonymized data on consumer spending to better understand COVID-19’s impact on Asian New Yorkers.

We compared changes in weekly spending from January through September 2020, as well as during the same timeframe in 2019. We focused on five neighborhoods—three with heavy Asian American populations (Manhattan’s Chinatown; Flushing, Queens; and Jackson Heights, Queens) and two diverse, lower socioeconomic neighborhoods (East New York, Brooklyn; and Jamaica, Queens) that also have many small, family-owned businesses, including grocers and restaurants, the focus here. 

Restaurant spending fell 82 percent

As a whole, New York City saw consumer spending fall 65 percent beginning in late February and accelerating into March. The spending decline, however, was far steeper for the predominantly Asian American communities. Consumer spending by early March in Chinatown—particularly in restaurants—had fallen by almost 82 percent. In Flushing, spending had declined 71 percent and 73 percent in Jackson Heights. 

Restaurant spending drove the decline in Asian American communities, in part because of their strong stake in food services. Nationally, Asian-owned businesses make up a sizable share (26 percent) of accommodations and food service, according to a McKinsey report. In New York’s Chinatown, the restaurant trade accounts for 40 percent of the overall spending compared with 24 percent citywide, according to our analysis.

By March, consumer spending at the city’s restaurants had declined by 85 percent. At the same time in Chinatown and Flushing, spending cratered with a 96 percent drop.

The spending slowdown in Chinatown also started six weeks earlier than the city as a whole. Spending in restaurants began to fall March 2 citywide but January 20 in Chinatown and Flushing. McKinsey found similar trends nationwide, attributing the early falloff to “misguided fears of the virus” that effectively shuttered businesses in Asian communities despite few reported cases.  

A lack of e-commerce options

Earlier reporting found that nearly one-third of Asian restaurants rely on cash, and only one in four has an online presence compared with 70 percent of restaurants in wealthier neighborhoods such as the West Village. As takeout and delivery became a lifeline for many, many restaurants in Chinatown were unable to pivot to online apps and sales as quickly. Citywide in New York, the share of digital transactions in restaurants and grocery stores doubled from a year earlier, to 24 percent. But in Asian communities, digital transactions inched up to only 3.2 percent.

A lack of digital tools also slowed access to government relief funds, according to the AAF. Many businesses keep their books on paper, which made it difficult to provide needed documentation in online applications. Language was also a barrier as many of the application forms were not available in translation. 

This report, published through a partnership between the Mastercard Center for Inclusive Growth and the Asian American Federation, analyses the impact of COVID-19 on consumer spending in New York City’s Asian business corridors. Go to the AAF website for the complete report.

NaFFAA continues to update its list of newly elected, re-elected Filipino American officials in 2020. Email for information.

© The FilAm 2021

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